2009 ENERGY

EFFICIENCY OPPORTUNITIES

REPORT

CONTROllING CORPORaTIONNaTIONal aUSTRalIa BaNk lImITEd aBN 12 004 044 937Period to which the report relates1 July 2008 – 30 June 2009

2009 ENERGY EFFICIENCY OPPORTUNITIES REPORT 2 NaTIONal aUSTRalIa BaNk

Our refurbished office at 50 Miller Street North Sydney, which has achieved a 5 Star Green Star Office Interiors design rating.

2009 ENERGY EFFICIENCY OPPORTUNITIES REPORT 3 NaTIONal aUSTRalIa BaNk

NAB’s climate change strategyClimate change is one of the most significant environmental, social and economic challenges facing governments, business and communities today. National Australia Bank (NAB) believes the financial sector has an important role to play in addressing the issue of climate change.

In 2007, NAB Group developed and publicly disclosed its Group-wide Climate Change Strategy. Our strategy has five elements:

• Leadership through our own actions – establishing our carbon inventory, making our operations carbon neutral, publicly reporting our progress and helping lead the debate and development of solutions to climate change.

• Engaging and assisting our people – providing office energy and resource reduction and volunteering opportunities and supporting our people who wish to personally take action on climate change.

• Understanding and backing our customers – through advice, as well as product and service offerings, to appropriately support local markets.

• Building key partnerships – with a range of stakeholders, including our suppliers, to help identify and implement solutions that assist our people, customers and communities to take action on climate change.

• Continuing to grow our understanding of climate risks and opportunities – to consider the impact of climate change in our lending and investment decisions, as well as other areas of relevant operational policy.

Carbon Neutral commitmentOur commitment to become carbon neutral by September 2010 is our most significant environmental commitment to date and it is a flagship program of our Climate Change Strategy.

Our journey towards carbon neutrality in 2010 is illustrated below:

The Energy Efficiency Opportunities Program2009 is our second year of publicly releasing our Energy Efficiency Opportunities Report. The requirements of the Energy Efficiency Opportunities (EEO) Act 2006 (Cth) have helped us to develop a disciplined approach to identifying, assessing and implementing energy efficiency opportunities. We believe energy efficiency is part of responsible business management and, combined with our carbon neutral commitment, it provides a focus for employee engagement through a growing voluntary network of green teams and champions across the Bank’s operations in Australia.

Identifying energy efficiency opportunities is also helping us understand the potential for energy and cost savings so that we are able to forecast our energy use and greenhouse emissions and put in place meaningful and achievable reduction targets.

Prioritisation of our energy efficiency projects is based on implementing those projects which deliver the most effective outcomes, while meeting our internal capital expenditure rules. We also face challenges to our goal to reduce energy consumption, in particular from our data centres, as energy consumption from these operations continues to grow to meet an increasing need for data processing capability.

A summary of our EEO Program activities undertaken to date is provided in this report.

NAB’s carbon reduction strategy

(zero net emissions)

2006 base year 230,000 tonnes

(Australian region)

2010 carbon neutralmeasure, monitor and report emissions reconcile & verify

reduce energy use and travel emissions1

switch to renewable energy where practical2

offset remaining emissions3

CLIMATECHANGE

2009 ENERGY EFFICIENCY OPPORTUNITIES REPORT 4 NaTIONal aUSTRalIa BaNk

Our assessments (1 July 2008 – 30 June 2009)National Australia Bank (NAB), with a total energy use of approximately 636,977 GJ, has been actively involved in the Australian Government’s Energy Efficiency Opportunities Program since it was introduced in July 2006. To date we have completed assessments at our two major data centres, 13 major office buildings and 221 retail branches, as well as undertaking representative assessments of signage illumination across our branch network, and remote shutdown of laptop and desktop computers across our building portfolio.

These assessments have been aimed at identifying cost effective energy efficiency opportunities with a payback period of up to four years. The site by site assessments involved an energy use assessment of each building by

an energy management consultant, combined with regular meetings of people from across NAB with relevant expertise and influence over energy use. During these meetings further opportunities were identified and then evaluated by employees with appropriate expertise within the business.

The assessments complied with the intent and key requirements of the Energy Efficiency Opportunities Program and have identified significant opportunities for achieving energy efficiency. The assessed sites completed during 2009 are responsible for 205,052 GJ of energy or 32% of NAB’s overall energy use, bringing the total percentage of sites assessed since the commencement of the Energy Efficiency Opportunities Program to 68% of total current energy use.

Assessment results (1 July 2008 – 30 June 2009)

Opportunities AssessedPeriod in which assessment was

undertaken

Energy use (GJ) per annum in the current

reporting year

Data Centre A 2007-08 107,169

383 King Street, Melbourne, VIC 2007-08 16,752

800 Bourke Street, Melbourne, VIC 2007-08 30,098

500 Bourke Street, Melbourne, VIC 2007-08 44,071

50 Miller Street, North Sydney, NSW 2007-08 4,164

100 St Georges Terrace, Perth, WA 2007-08 6,768

Representative assessment – Under Awning Signage Illumination Replacement

2007-08 4,539

Representative assessment – Remote Desktop/Laptop Shutdown

2007-08 11,5321

Data Centre B 2008-09 72,164

120 Spencer Street, Melbourne, VIC 2008-09 10,237

555 Collins Street, Melbourne, VIC 2008-09 9,659

197 Prospect Hwy, Seven Hills, NSW 2008-09 5,240

1 Homebush Bay Drive, Rhodes, NSW 2008-09 4,954

105 Miller Street, North Sydney, NSW 2008-09 15,232

255 George Street, Sydney, NSW 2008-09 16,559

22-28 King William Street, Adelaide, SA 2008-09 5,493

100 Creek Street, Brisbane, QLD 2008-09 4,010

Retail Branch Efficiency Program (Phase 1) 2008-09 61,504

Total energy assessed 430,145

Total energy use in the current reporting year 636,977

Total energy assessed expressed as a percentage of total current energy use 68%

All energy use data is accurate to within +/-5%.

1. Excludes energy use of desktops and laptops in the sites that have been assessed on a site by site basis as listed above, to avoid double-counting energy use. Total calculated energy use for desktops and laptops across NAB is 33,230 GJ.

2009 ENERGY EFFICIENCY OPPORTUNITIES REPORT 5 NaTIONal aUSTRalIa BaNk

EEO assessment evaluation (1 July 2008 – 30 June 2009)

Status of opportunities identified Number of opportunities

Estimated energy savings per annum by payback period (GJ)

Total estimated energy savings per

annum (GJ)0 – < 2years

2 – ≤ 4years

> 4years

Outcomes of assessment

Total Identified 292 10,762 20,602 10,418 41,782

Business Response Under Investigation 10 573 954 0 1,527

To be Implemented 43 360 3,044 0 3,404

Implementation commenced

57 6,050 4,483 130 10,663

Implemented 162 3,283 10,679 7,748 21,710

Not to be Implemented 20 497 1,442 2,540 4,479

All opportunities have been assessed to an accuracy of +/-30% or better.

Update on EEO assessments from previous reporting period (1 July 2008 – 30 June 2009)

Status of opportunities identified Number of opportunities

Estimated energy savings per annum by payback period (GJ)

Total estimated energy savings per

annum (GJ)0 – < 2years

2 – ≤ 4years

> 4years

Outcomes of assessment

Total Identified 91 66,309 30,950 77,799 175,058

Business Response Under Investigation 5 202 0 0 202

To be Implemented 2 6080 0 0 6,080

Implementation commenced

8 4372 10136 74381 88,889

Implemented 58 48225 20712 2248 71,185

Not to be Implemented 18 7430 102 1170 8,702

All opportunities have been assessed to an accuracy of +/-30% or better.

2009 ENERGY EFFICIENCY OPPORTUNITIES REPORT 6 NaTIONal aUSTRalIa BaNkNaTIONal aUSTRalIa BaNk

Application of revised office accommodation design guidelinesNAB has revised its Design Guidelines for office accommodation to ensure that new or refurbished office accommodation will be designed with the objective of meeting a minimum 4 star Green Star rating (with an objective of a 5 star Green Star rating where financially viable). This means that we are designing our tenancy fit outs with the objective of achieving a 4 star National Australian Building Environmental Rating Scheme (NABERS) Energy performance rating, as it is a conditional requirement for obtaining a 4 star Green Star – Office Interiors rating.

In our 2008 EEO Report we stated that our revised Design Guidelines for office accommodation were being applied to our major refurbishments. These refurbishments have a combined estimated savings of 30,344 GJ per annum:

• 500 Bourke Street, Melbourne – This refurbishment is one of the largest Green Star joint tenant/landlord refurbishments in Australia. The choice to refurbish rather than rebuild is the more sustainable option and it also means we can conserve one of our most iconic office buildings.

• 100 St Georges Terrace, Perth – We are aiming to achieve a 5 star Green Star Office Interiors design rating in our Perth head office. We moved into this building in September 2009 and the building is operating as planned.

• 50 Miller St, North Sydney – This office has achieved a 5 star Green Star Office Interiors design rating as well as a NABERS Energy tenancy rating of 4 stars.

During the current reporting period the Design Guidelines have been applied to two new refurbishment projects with estimated energy savings of 6,032 GJ per annum:

• 22-28 King William St, Adelaide – Our South Australia head office is designed to achieve a NABERS energy rating of 4.5 stars and is also aiming to achieve a Green Star Office Interiors rating of 5 stars. The refurbishment is due for completion by April 2010.

• 255 George St, Sydney – We are applying our design guidelines to the refurbishment at our New South Wales head office. This is due for completion in September 2010.

One of the refurbished floors at our offices at 500 Bourke St, Melbourne.

2009 ENERGY EFFICIENCY OPPORTUNITIES REPORT 7 NaTIONal aUSTRalIa BaNk

Data Centre Optimisation ProgramData processing demands continue to increase consistent with the growth of the organisation. Therefore, we continue to look for opportunities to deliver efficiency improvements, emissions reductions and associated cost savings throughout our data centres. We are currently installing a tri-generation system at Data Centre A (address undisclosed) which will enable us to simultaneously produce electricity, heating and cooling using a gas-fired generator and will result in an estimated energy saving of 25,273 GJ per annum.

Data Centre B is the second highest energy consuming site in our property portfolio, consuming 11% of NAB’s total energy. A comprehensive energy analysis of the Uninterruptible Power Supply (UPS) identified a significant opportunity to reduce the electricity use at this site through an upgrade of the existing UPS. The UPS was more than 25 years old and much energy was lost through the system. During April 2009, we upgraded the conventional UPS to a highly efficient model significantly reducing the energy lost between the input and output. The resulting estimated annual energy savings are 4,388 GJ.

In addition, we have commenced Phase 1 of our server virtualisation program. Virtualising our server fleet allows multiple applications to operate on each server, thus reducing the overall number of servers required. This reduction in numbers not only reduces the energy demand for the servers, it will also allow us to develop and implement operating environments which have a smaller footprint and can manage cooling requirements much more efficiently, again reducing our energy demand.

Tri-generation Process Overview

DATA CeNTre

Mains Electricity

Greener Electricity

Heated Water

Natural Gas

Heated Water

Exhaust Gases

Chilled WaterABSOrPTION

CHILLer

GeNerATOr eNGINe

Tri-generation Process Overview.

2009 ENERGY EFFICIENCY OPPORTUNITIES REPORT 8 NaTIONal aUSTRalIa BaNk

Retail Branch Efficiency Program (Phase 1)During the 2009 financial year we embarked on a comprehensive Energy Efficiency Program across our retail branches. We engaged energy management contractors to undertake energy efficiency opportunity assessments and implemented energy savings initiatives at branches identified as having the greatest potential for improved energy efficiency. The program involved installing a range of solutions that will achieve the greatest energy and financial benefit. Technical solutions implemented included air conditioning time control, efficient fluorescent lighting, lighting time controls, smart metering and motion activated control. Other solutions including de-lamping and energy efficient signage were also implemented.

During 2009 energy efficiency opportunity assessments were conducted at 221 branches, and efficiency works were completed at 118 branches. The estimated energy savings from Phase 1 of the retail branch efficiency program are 17,436 GJ.

The NAB Chadstone branch was one of our 118 branches that received energy efficiency upgrades this year.

2009 ENERGY EFFICIENCY OPPORTUNITIES REPORT 9 NaTIONal aUSTRalIa BaNk

EEO progress to dateWe have been identifying, assessing and implementing energy efficiency opportunities since the Energy Efficiency Opportunities (EEO) Act 2006 (Cth) came into effect. A summary of all energy efficiency opportunities identified since December 2006 is presented below, including assessments undertaken in the previous

reporting period, as well as assessments that are currently in progress. We are continuously identifying new opportunities through our building environmental management committees and suggestions received through employees and industry specialists.

DeclarationThe information included in this report has been reviewed and noted by the board of directors and is, to the best of my knowledge, correct and in accordance with the Energy Efficiency Opportunities Act 2006 and Energy Efficiency Opportunities Regulations 2006.

Michaela HealeyGroup Company SecretaryNational Australia Bank Limited

All opportunities have been assessed to an accuracy of +/-30% or better.

Number of Opportunities

482

24

46

67

232

redundant/Not to be Implemented 113

Potential energy Saving (GJ per year)

348,142

2,450

10,534

110,020

122,103

Total Identified

Under Investigation

To be Implemented

Commenced

Done

©2009 National Australia Bank Limited ABN 12 004 044 937 AFSL 230686 73548A1109

www.nabgroup.com